Microsoft to acquire Nokia’s devices & services business for around EUR 5.44B ($7.2B)

In a surprise move, Microsoft announced Monday evening that it has inked a deal with Nokia to acquire “substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services.”

Nokia chief Elop, a former Microsoft executive, will return as Microsoft’s board ponders a successor to current CEO Steve Ballmer, who will depart sometime in the next 12 months after initiating a reorganization intended to transform the software company into a devices and services group in the mould of Apple Inc.Nokia board chairman Risto Siilasmaa would take over CEO duties while the Finnish firm looked for a new CEO.

The sale of Nokia’s phone business marks the exit of a 150-year-old company that once dominated the global cellphone market and remains one of Europe’s premier technology brands, even though Apple and Samsung Electronics’ ascendancy all but reduced it to irrelevancy in Asia and North America in recent years.
Finland’s Nokia, once the undisputed leader in mobile phones, has been struggling to respond to the challenge from smartphone makers such as Apple and Samsung.The Redmond company will pay Nokia a cool 3.79 billion euros ($4.99 billion) for the business, and 1.65 billion euros ($2.18 billion) for its patent armory.

The deal is expected to close in the first quarter of 2014 and is subject to approval by Nokia’s shareholders and regulatory approvals. Nokia partnered in 2011 with Microsoft and uses Microsoft’s Windows software to run its mobile phones.

“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies,” Microsoft’s outgoing CEO, Steve Ballmer, said in a statement.

“Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services.”

Nokia said in a statement it expected that Elop, along with senior executives Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber, would transfer to Microsoft when the deal was concluded. It did not say what roles they would take at Microsoft.